Kinder Morgan sells stake in offshore crude oil export terminal

Houston pipeline operator Kinder Morgan has sold its stake in a offshore crude oil export terminal in the Gulf of Mexico known as Texas COLT, the company confirmed.

Houston pipeline operator Kinder Morgan has sold its stake in a offshore crude oil export terminal in the Gulf of Mexico known as Texas COLT, the company confirmed.

Photo: Kinder Morgan

Photo: Kinder Morgan

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Houston pipeline operator Kinder Morgan has sold its stake in a offshore crude oil export terminal in the Gulf of Mexico known as Texas COLT, the company confirmed.

Houston pipeline operator Kinder Morgan has sold its stake in a offshore crude oil export terminal in the Gulf of Mexico known as Texas COLT, the company confirmed.

Photo: Kinder Morgan

Kinder Morgan sells stake in offshore crude oil export terminal

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Houston pipeline operator Kinder Morgan has sold its stake in a proposed offshore crude oil export terminal in the Gulf of Mexico known as Texas COLT, the company confirmed.

Financial terms of the deal were not disclosed, but Kinder Morgan confirmed in a Monday afternoon statement that the company sold its stake to Enbridge, the lead developer in the project.

"Given the ongoing commitment required to move this project forward through the regulatory phase and, after an internal review within Kinder Morgan, it was determined that continuing with the project does not align with our strategic priorities," the company said in a statement.

Proposed to be built in an area of the Gulf of Mexico about 40 miles south of Freeport, Texas COLT was launched as a joint venture of Enbridge, Kinder Morgan and German marine terminal operator Oiltanking to accommodate Very Large Crude Carriers, or VLCCs.

Capable of carrying 2 million barrels of crude oil in a single load, VLCCs are emerging as the tanker of choice for exports, but U.S. ports are too shallow to handle them. A fully loaded VLCC tanker requires 66 feet of water, while ship channels in Texas and elsewhere are typically between 40 to 45 feet deep prompting the need for offshore terminals.

"Texas COLT is a more strategic and desirable project for Enbridge," Kinder Morgan said in its statement. "The project aligns with Enbridge's existing footprint in the U.S. Gulf Coast region and their stated interest in growing their position in the region."

If approved by the U.S. Department of Transportation's Maritime Administration, the offshore export terminal would be supported by an an underwater pipeline and an onshore tank farm capable of storing up to 15 million barrels of crude.

Drawing on crude oil from U.S. shale plays such as the Permian Basin in West Texas, the Eagle Ford Shale pf South Texas and the Bakken Shale of North Dakota, the offshore platform would be able of loading a VLCC tanker in 24 hours.

In a statement, Enbridge officials said the joint venture is moving forward without Kinder Morgan and will still be able to provide multiple varieties of U.S. crude oil for export.

"The COLT partnership, which combines Enbridge's leading North American asset portfolio with an international petroleum terminaling company in Oiltanking, continues to be central to the strength of the Texas COLT proposal," Enbridge stated.